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There is big risk either way. You can live frugal and sock away a lot of money for the magical day of (early) retirement and then something happens and you don't live to see it, but your heirs may be very happy. You can also spent everything all the time and then be forced to work until you die. You have to be the judge which way is better for you. And I have no business judging you for your decision.
There is big risk either way. You can live frugal and sock away a lot of money for the magical day of (early) retirement and then something happens and you don't live to see it, but your heirs may be very happy. You can also spent everything all the time and then be forced to work until you die. You have to be the judge which way is better for you. And I have no business judging you for your decision.
Extreme Frugality I get... Recycling used paper towels... just no.
But as I pointed out a few posts above, you don't NEED to live frugally to become a millionaire.
It's about balance, paying yourself first, and foregoing a few unnecessary luxuries like avocado toast and Starbucks - if you can't afford it.
But that doesn't mean you can't take vacations, drive a new car, or go out to eat.
I would rather die leaving my heirs with a ton of cash, rather than having them see me eat cat food or have to find a way to take care of me.
And if I have to "support" you because you are retiring on welfare and Medicaid because you chose NOT to save when it was possible for you.. then yes, I do have the right to judge you.
Again, I'm not indifferent to those who are working hard on minimum wage and find it difficult to save... it's easier said than done to rise out of some situations. It's actually pretty sad to think that they may have to work until they die.
But to those households in the 22% tax brackets on up - it's (likely) your own fault if you have to work till you die.
Not realistic for most people. But I know one who probably beat that. Lived with parents all his life. Job was walking distance for first 20 years. Never smoked or drank, his main vice was bowling.
Saving double your income should not be that difficult. Saving at the rate of 10% will mean under average market conditions, the investor will be able to save about double their annual income in about 12-14 years. With a constant income and a constant 10%, the investor should have about an investment of about 20 times income after 40 years of working. That is enough to maintain the same standard of living in retirement even without social security. A 10% savings rate sounds high, but most companies kick in at a rate of 3-6% so that helps a lot.
Most Americans won't save that much money because most expect social security to save or they're working toward a pension. Take away social security and you'll see more Americans saving overnight. Until then, most Americans will live and spend like there's no tomorrow.
But alot of it comes downs to income. A career burger flipper will not be able to save as much as a neurosurgeon.
Lofty goal but not realistic for the vast majority. If you make $100 grand, live your Mom's basement rent free and walk to work maybe. Then you have a bunch of money and absolutely nothing to show for it. Half of it would disappear the minute you decided to live a normal adult life.
Lofty goal but not realistic for the vast majority. If you make $100 grand, live your Mom's basement rent free and walk to work maybe. Then you have a bunch of money and absolutely nothing to show for it. Half of it would disappear the minute you decided to live a normal adult life.
If you have been much of money isn’t that something to show for it? I also don’t think it takes 100k+ a year, living at home with your parents and being without a car to have 2x your income by 35. That’s seems more like and excuse line to justify not hitting that mark
First off one the basis for measurement here for success is savings relative to income. When it should be savings relative to cost/consumption.
If someone had their home paid for and say in-home health care coverage a significant amount of retirement costs have been curtailed. It’s more about cost and risk management rather than savings relative to income. My grandparents we’re public school educators in upstate ny. I guarantee they didn’t have 2x income saved at 35 however they were always very fragile and wise when it came to cost management. Their standard of living through retirement has been even keeled and they are far ahead of people that outearned the, 2-3x over their careers.
I am 59 now, thinking back when I was 35 we must have been fairly close to having 2X my annual income invested in our portfolio.
Me too. Probably around that time I was making 35K and lived in Hawaii which has a super high cost of living. But I ALWAYS put money away into retirement. Plus I was single, so no other income to help out.
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First off one the basis for measurement here for success is savings relative to income.
When it should be savings relative to cost/consumption.
Nope. Income ...and whether that's $10,000 per year or $100,000.
What so many seem to have difficulty with is the idea of doing the saving thing FIRST.
That has to come first. Always. Even if it's WITHOUT the benefit of pretax accounts.
Only then can we determine the nature ofour consumption:
making what we have left work out the best it can be made to.
Most of that will be about keeping housing costs within reason.
How large a home we can have and/or how many others we're obliged to share a home with.
It's not complicated.
Me too. Probably around that time I was making 35K and lived in Hawaii which has a super high cost of living. But I ALWAYS put money away into retirement. Plus I was single, so no other income to help out.
If we're talking single and cash-in-the-bank (or other hard assets easily convertible into cash...gold bullion, Amazon stock, Yenko Camaros, etc.), that is a whole different ball game than "me and my wife and our jointly funded, pre-tax contribution retirement account that has seen remarkable gains the past 10 years since we started it." Don't count that chicken before it's hatched.
That would be like me having had $120-130k cash in the bank two years ago. Like I said before, maybe if I'd been living in Mom's basement and walking to work since graduating from college 13 years ago and saving $1k a month every month without fail. That should help paint a picture of just how uncommon it is to have that kind of net worth by 35. Most people don't start putting the big bucks away until they're in their 40's and 50's.
Last edited by UrbanAdventurer; 05-20-2018 at 06:09 PM..
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